Great Plains Studies, Center for
Date of this Version
Winter 1997
Document Type
Article
Citation
Great Plains Quarterly Vol. 17, No. 1, Winter 1997, pp. 49-62.
Abstract
In the year 1880 two brothers, William G. and Charles E. Conrad, organized the First National Bank at Fort Benton in north central Montana, capitalized at $50,000. They supplied at least $10,500 of this capital and gradually came to own a majority of the stock. From this modest start, the Conrad partnership expanded through involvement not only in the First National but also in other Montana banks until its emergence as a banking empire thirty-four years later with a paid-up capital of more than half a million dollars. The partnership grew by entering several geographical markets, becoming a regional partnership.
The Conrad banking houses, first those of William and Charles and, after the death of Charles in 1902, those of his wife, Alicia, and William, became very influential in north central and northwestern Montana during the late nineteenth and early twentieth centuries. Owned and personally managed by the Conrads, they helped finance ranchers, merchants, farmers, and manufacturers-the businessmen whose enterprises were essential to the economic development of these regions. In funding Montana ranching, farming, mercantile, and manufacturing businesses, the Conrads relied primarily on a network of four single-unit, commercial banking houses: besides the First National Bank of Fort Benton, there was the Northwestern National Bank at Great Falls in north central Montana, the private banking firm of Conrad Brothers (after 1891 the Conrad National Bank) at Kalispell in northwestern Montana, and the Conrad Banking Co. (a private bank that was converted to a state bank in 1911) in Great Falls.
THE BANKING BUSINESS
The Conrads thus conducted their banking through the three different types of commercial banking houses that existed in Montana and the United States-the national bank, the private bank, and the state bank. Each of these was attractive in its own way. The Conrads quickly recognized the advantages of holding a national charter. According to the National Currency Act of 1863 and the National Bank Act of 1864, which established the present national banking system including the office of the comptroller of the currency in Washington, D.C., national banks could issue national bank notes by acquiring federal government bonds to back them. Ever since 1863 the national bank notes had constituted the national currency. Public confidence in the national banks came partly because of their relatively high initial capitalization- a minimum of $50,000 until 1900 and $25,000 thereafter-and partly because close federal government supervision enhanced their soundness. Their minimum reserve equaled 15 percent of all their bank notes and deposits, and they limited loans to any single borrower to 10 percent of their capital and surplus.1
Comments
Copyright 1997 by the Center for Great Plains Studies, University of Nebraska-Lincoln